The U.S. Securities and Exchange Commission (SEC) is moving forward with plans to introduce a formal “token taxonomy,” a new regulatory framework intended to bring clarity to the classification of digital assets. SEC Chairman Paul Atkins, speaking at a fintech conference on November 12, 2025, announced that the Commission will soon consider establishing a four-category system to definitively distinguish which tokens qualify as securities under U.S. law. This initiative, part of the SEC’s “Project Crypto,” marks a significant shift away from the previous reliance on “regulation by enforcement.”
The proposed framework is anchored in the long-standing Howey Test—the legal benchmark for defining an investment contract—but applies it with a crucial recognition: that the legal status of a token is dynamic and can change over time. Atkins emphasized that a token may initially be sold as a security (if its value depends on the essential efforts of others), but could later lose that classification as its underlying network becomes fully functional and decentralized, and the issuer’s managerial control diminishes.The four proposed categories are: Digital Commodities (like Bitcoin and fully decentralized network tokens, deemed non-securities); Digital Collectibles (like NFTs for art or in-game items, deemed non-securities); Digital Utilities (tokens for access, tickets, or membership, deemed non-securities); and Tokenized Securities (tokens representing traditional stocks or bonds, which remain regulated as securities). This clarification is expected to significantly reduce regulatory uncertainty, paving a clearer path for institutional investment across the digital asset ecosystem.
 is moving forward with plans to introduce a formal "token taxonomy," a new regulatory framework intended to bring clarity to the classification of digital assets.){kind=link}